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Managing 404 errors

What is the best way to manage 404 errors for pages that are no longer on the server.

For example, client deletes old site from server and replaces it with new site. Webmaster tools is reporting 100 + 404 errors form the old site. I've blocked the 404 pages with robot.text. Requested removal in google webmaster tools. And created a custom 404 page - http://www.tvsphoto.com/missingurlexample

Also, be sure to have a user friendly 404 page. 404 is unavoidable due to typos, silliness and random acts of God, so it's always wise to have a highly functional page as a catchall for anything that you can't 301 redirect.

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